Revamped labor laws
February 10, 2012
Spain's conservative government on Friday passed far-reaching labor market reforms which are aimed at reducing the country's record-high unemployment rate of almost 23 percent.
The situation is particularly serious among young people. Almost every second young man or woman below the age of 25 is jobless.
"The changes serve to encourage companies to hire young people and will also help the long-term unemployed and people with dependents," Deputy Prime Minister Soraya Saenz said in a statement.
The reform package includes stipulations on open-ended contracts and aims to reduce the number of temporary ones that have been very common in Spain and have made the workforce extremely vulnerable to swings in economic growth.
Worse deal for fired workers
The Spanish government also intends to cut severance pay to a maximum of 33 working days a year from the previous 45 days, Employment Minister Fatima Banez told a news conference.
The cabinet's reform efforts are meant to convince markets that Spain will be able to slash its public deficit and iron out structural weaknesses in an economy that is heading back into recession.
Analysts believe the labor law reforms were kept rather moderate so as not to alienate potential voters ahead of local elections in heavily populated Andalucia and the northern region of Asturias.
hg/nk (Reuters, AP, dpa)